Obama Gives up on Idea of Taxing Oil Companies

During the 2008 presidential campaign, with oil prices surpassing $140 a barrel, then Democratic candidate Barack Obama made a lot of noise about imposing a windfall tax on the profits of big oil companies. But the idea has since been dropped, seemingly never to return, Politico reports.

Now, even with oil prices surging above $100 and gasoline prices averaging close to $4 a gallon nationally, President Barack Obama apparently has no plans to revive the idea. Obama originally dropped the tax plan when he took office in 1999, as oil prices dropped sharply.

And now, he doesn’t have the political strength to push through any kind of windfall tax. With the moderates who once dominated the Senate now out of office, Obama could count on little Republican backing for the idea. And long-time supportive Democrats have retired.

While liberals were quite upset that Obama dropped the windfall tax idea, the administration thought it might have better luck erasing tax subsidies for oil and gas companies. Obama has included that idea in each of his four budgets.

“Ending unwarranted subsidies for big oil, which represent billions in taxpayer dollars each year that could be used more effectively, is clearly more achievable, and so it makes sense for us to put our focus there,” an administration official told Politico.